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Christian and Social Democrats agree on grand coalition government

Leaders from Germany's two largest parties have reached a provisional deal on forming a coalition government after all-night talks in Berlin. This concludes weeks of negotiations following September elections.

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Key points in Germany's new coalition

The last negotiating session lasted some 17 hours in Berlin, concluding with news of an agreement on the so-called "grand coalition" just after 5 a.m. local time (0400 UTC). The Christian Democrats and Social Democrats had pledged to conclude their negotiations and present a coalition deal by Wednesday, although more time would have been available if required.

The leaders entered the final day of talks with several unresolved issues and points of contention, but the roughly 75 participants managed to reach the required compromises.

How to finance various policy pledges was reportedly the final sticking point in the talks. Chancellor Angela Merkel, the leader of her Bavarian CSU sister party, Horst Seehofer, and Social Democrat chairman Sigmar Gabriel engaged in private discussions in the early hours of Tuesday morning to clear up this last point.

After these three top-level participants smoothed over the final cracks, the largest group of coalition negotiators - comprising more than 70 politicians - approved the draft deal for a union of Germany's two political giants.

During the course of the marathon talks, compromises were reached on issues including Germany's dual-citizenship laws, a minimum wage, pension reforms, and a toll system on German Autobahns for foreign visitors - on the condition that such a move could conform with European Union laws.

"We negotiated hard till the end," said Social Democrats general secretary Andrea Nahles, adding that "for us it's a package that, I believe, we can present to our members, and we recommend it and say we can say yes to it."

The agreements were the culmination of tough negotiations between center-right and center-left parties who campaigned on very different platforms. Possibly the Christian Democrats' core demand was that no German taxes should be raised, while their colleagues from Bavaria were able to at least partially push through their controversial plans for motorway tolls.

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Watch DW's immediate analysis from Berlin

The Social Democrats secured a nationwide minimum wage of 8.50 euros ($11.55) per hour that will be introduced in 2015, with industry and labor associations given the ability to negotiate exceptions until 2017. Beginning next year, full retirement will be available at age 63 after at least 45 working years, another sticking point for the Social Democrats.

The finalized draft of the coalition agreement was due for presentation later on Wednesday.

The Social Democrats, junior partners in the new coalition after receiving barely half as many votes as the Christian Democrats in the September 22 elections, have unusually promised their 470,000 party members a vote on any coalition deal, with an outcome expected December 14. In theory, this means that the deal could potentially falter at grass roots if the party faithful disapprove of the details.

The decision over who will fill Germany's cabinet minister positions will be made after the Social Democrats vote. The Christian Democrats are set to be allocated five posts plus head of the chancellery - a separate post from chancellor. The CSU are to have three ministers and the Social Democrats six.